Facebook's F8 event likely to focus on mobile ad strategy

Updated 7:18 am, Wednesday, April 30, 2014

Photo: Manu Fernandez, Associated Press

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Mark Zuckerberg Chairman and CEO of Facebook speaks during a conference at the Mobile World Congress, the world's largest mobile phone trade show in Barcelona, Spain, Monday, Feb. 24, 2014. Expected highlights include major product launches from Samsung and other phone makers, along with a keynote address by Facebook founder and chief executive Mark Zuckerberg. (AP Photo/Manu Fernandez)

Mark Zuckerberg Chairman and CEO of Facebook speaks during a conference at the Mobile World Congress, the world's largest mobile phone trade show in Barcelona, Spain, Monday, Feb. 24, 2014. Expected highlights

The last time Facebook hosted its big developer's conference, the social network introduced Timeline, which became a jarring change for some of the company's then 750 million members.

Nearly three years later, the F8 event scheduled for Wednesday isn't expected to reveal anything with as dramatic an impact for Facebook's now 1.28 billion members.

But the one-day conference should offer more insight into how Facebook is reshaping itself through mobile advertising and several new stand-alone apps - not to mention technology to supposedly extend its reach to the other 6 billion people on Earth.

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"It's a very different company than it was three years ago," said Debra Aho Williamson, principal analyst for social media with the research firm eMarketer. "It's a company that now has the ability to make a huge $19 billion acquisition."

That deal, which has not yet closed, was only the start of a recent buying spree. In March, Facebook agreed to pay $2 billion for virtual reality device maker Oculus VR, and last week picked up fitness tracking app Moves, from Finnish startup ProtoGeo Oy, for an undisclosed amount.

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As it did with Instagram, which the Menlo Park company bought for $741 million in 2002, Facebook pledged to keep the acquisitions as separate units to let them expand their own audiences.

Facebook executives want to offer a wider breadth of apps and services with social features instead of trying to herd all members into "one monolithic app," said Gartner Research analyst Brian Blau.

Adapting tactics

"I don't necessarily think they're reinventing themselves," he said. "They're taking the core piece of their social network and really making sure it's going to fit what people are going to do with their devices."

That's a shift from September 2011, when Zuckerberg used F8 to reveal Timeline, which was intended to drive members to use Facebook more.

Timeline remade profile pages into "digital scrapbooks" that kept a running list of updates and activities. The move brought more content into public view, and for many of the members, Timeline was too radical a change.

Critics called for boycotts and a Federal Trade Commission probe because Timeline raised more questions about privacy and what Facebook intended to do with the user data it gathered.

Ultimately, the uproar died down and Facebook members became accustomed to the feature, which has come to define the way people use the social network. And instead of losing members, Facebook gained nearly a half-billion more.

What's radically changed instead is how those members get to Facebook - 1.01 billion monthly active users now access it on mobile devices. And 59 percent of advertising revenue comes from mobile.

To address those shifts, Facebook is expected to use F8 to unveil a mobile advertising network that would compete with similar networks from Google and Twitter. The online news site TechCrunch called it a "Facebook Audience Network."

Vast reach

Williamson said such a network might only amount to an "add-on" advertising product, given the social network's already vast reach.

"Facebook is so large and has so many people using it that there are so many ways to target those people," she said. "So it could just find continued ways to improve the targeting and effectiveness of advertising."

And although developers paying to promote their apps are driving the current mobile ad market, Williamson questioned whether it is sustainable.

"Five years from now, are we still going to see mobile app developers continue to spend a lot of money on advertising?" she said.

Also at F8, Facebook will demonstrate how developers can take advantage of the app-creation tools and platform created by Parse, a company Facebook bought a year ago.

Mystery topic

Facebook teases the expected crowd of 2,500 developers attending the sold-out conference at the Concourse at the San Francisco Design Center with an afternoon agenda item under the topic "Monetize" that simply reads, "To Be Announced (You Won't Want to Miss It!)"

Blau said Facebook could introduce another e-commerce or payments platform, although previous attempts with products like Gifts and Credits failed to take hold.

Facebook also plans to showcase projects under development by Internet.org, a side organization co-sponsored by Facebook and several mobile-device makers. Those include a proposal to use unmanned solar-powered aircraft to bring Internet access to parts of the world still unconnected to the Web.

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